TY - JOUR T1 - Employing Analytics to Move Past the Subprime Meltdown to a Brighter Future JF - The Journal of Structured Finance SP - 6 LP - 12 DO - 10.3905/jsf.13.4.6 VL - 13 IS - 4 AU - Michael Bykhovsky Y1 - 2008/01/31 UR - https://pm-research.com/content/13/4/6.abstract N2 - Collateralized mortgage and debt obligations (CMOs and CDOs respectively) have traditionally been considered among the strongest of investments, largely because of the positive ratings third-party ratings agencies have given to many of these bonds. Today, however, many securities are experiencing record losses and almost everyone is asking why. Had the investors understood how to leverage available analytics to scrutinize investments and simulate possible negative macroeconomic outcomes, many of the faulty investments might not have been made. At a minimum, deeper analysis could have revealed the complexities and sensitivities of the financial structures in which institutions were investing. This article looks at some of the contributing factors leading to the challenges facing the market today, and focuses as well on the types of analysis and modeling that can strengthen investors' understanding of the inherent risks associated with these investment vehicles and, in turn, help prevent future losses.TOPICS: CLOs, CDOs, and other structured credit, legal and regulatory issues for structured finance ER -